Maruwa Co Ltd reports 94.5% Net Income growth in 2018 and 7.3 pp EBITDA Margin growth from 21.4% to 28.7%
27 Apr 2018 • About Maruwa Co Ltd (
$MAW) • By InTwits
Maruwa Co Ltd reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 28.7% in FY2018 vs. 21.4% in FY2017 vs. 17.8% in FY2014
- Maruwa Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.3%. At the same time it's a lot of higher than industry average of 2.5%.
- CAPEX is quite volatile: €943m in 2018, €777m in 2017, €1,312m in 2016, €2,171m in 2015, €1,419m in 2014
- The company has highly profitable business model: ROIC is 19.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Maruwa Co Ltd's Revenue jumped on 19.7%. During the last 5 years Revenue growth bottomed in FY2016 at -6.8% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 5.5% to 3.3% in FY2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2015 at 14.7% and was growing since that time.
Gross Margin increased on 6.1 pp from 36.9% to 43.1% in FY2018. Gross Margin stuck to a growing trend at 2.7 pp per annum in the last 5 years. SG&A as a % of Revenue decreased slightly on 1.7 pp from 17.9% to 16.2% in FY2018. SG&A as a % of Revenue followed a declining trend at -1.8 pp per annum in FY2014-FY2018.
Net Income margin increased on 5.5 pp from 8.9% to 14.4% in FY2018. During the last 5 years Net Income margin bottomed in FY2015 at 2.7% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 6.9% in FY2018. CAPEX/Revenue showed almost no change from FY2015 to FY2018. For the last three years the average CAPEX/Revenue was 5.8%. During FY2014-FY2018 CAPEX as a % of Revenue bottomed in FY2016 at 4.4% and was growing since that time.
Return on investment
The company operates at good ROIC (19.2%) and ROE (12.0%). ROIC increased on 7.8 pp from 11.4% to 19.2% in FY2018. ROE increased on 5.3 pp from 6.7% to 12.0% in FY2018. During the last 5 years ROIC bottomed in FY2015 at 5.7% and was growing since that time. During the last 5 years ROE bottomed in FY2015 at 2.2% and was growing since that time.
Leverage (Debt)
The company paid down all the debt in FY2018. Cash jumped on 22.0%.
Financial and operational results
FY ended 31 Mar 2018
Maruwa Co Ltd ($MAW) key annual financial indicators| mln. JPY | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 33,475 | 32,811 | 30,578 | 32,187 | 38,513 | 19.7% |
| Gross Profit | 10,983 | 9,827 | 10,984 | 11,890 | 16,584 | 39.5% |
| SG&A | 7,634 | 7,423 | 6,127 | 5,764 | 6,233 | 8.1% |
| EBITDA | 5,947 | 4,832 | 6,006 | 6,891 | 11,041 | 60.2% |
| Net Income | 2,586 | 884 | 2,287 | 2,850 | 5,544 | 94.5% |
Balance Sheet
|
|---|
| Cash | 13,359 | 14,222 | 15,380 | 18,027 | 21,995 | 22.0% |
| Short Term Debt | 445 | 993 | 138 | 23 | 0 | -100.0% |
| Long Term Debt | 1,159 | 253 | 115 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 2,555 | 2,139 | 1,343 | 1,969 | 2,671 | 35.7% |
Ratios
|
|---|
| Revenue growth | 37.2% | -2.0% | -6.8% | 5.3% | 19.7% | |
| EBITDA growth | 37.7% | -18.8% | 24.3% | 14.7% | 60.2% | |
|
|---|
| Gross Margin | 32.8% | 30.0% | 35.9% | 36.9% | 43.1% | 6.1% |
| EBITDA Margin | 17.8% | 14.7% | 19.6% | 21.4% | 28.7% | 7.3% |
| SG&A, % of revenue | 22.8% | 22.6% | 20.0% | 17.9% | 16.2% | -1.7% |
| Net Income Margin | 7.7% | 2.7% | 7.5% | 8.9% | 14.4% | 5.5% |
| CAPEX, % of revenue | 7.6% | 6.5% | 4.4% | 6.1% | 6.9% | 0.8% |
|
|---|
| ROIC | 8.2% | 5.7% | 9.0% | 11.4% | 19.2% | 7.8% |
| ROE | 6.7% | 2.2% | 5.5% | 6.7% | 12.0% | 5.3% |
| Net Debt/EBITDA | -2.0x | -2.7x | -2.5x | -2.6x | -2.0x | 0.6x |
Peers in Electronic & Electrical Equipment
Below we provide Maruwa Co Ltd benchmarking against other companies in Electronic & Electrical Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Image Scan Hldgs ($IGE) | -13.5% | -22.2% | 94.1% | 51.9% | |
| Flowgroup ($FLOW) | 141.9% | 21.1% | 144.6% | 39.8% | |
| Gooch & Housego ($GHH) | 10.8% | 12.3% | 9.3% | 30.2% | |
| Walsin Lihwa Corp ($WALS) | | -8.4% | -4.0% | 17.0% | |
| Stadium Group ($SDM) | -1.1% | 29.0% | -1.5% | 15.2% | |
| |
|---|
| Median (16 companies) | -4.5% | -1.1% | 0.9% | 8.9% | |
|---|
| Maruwa Co Ltd ($MAW) | | -2.0% | -6.8% | 5.3% | 19.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Prophotonix Ltd ($PPIR) | | | 45.4% | 44.6% | |
| Gooch & Housego ($GHH) | 40.5% | 39.4% | 37.5% | 41.1% | |
| Zytronic ($ZYT) | 36.6% | 41.9% | 42.8% | 41.1% | |
| Elektron Technology ($EKT) | 34.8% | 35.6% | 37.2% | 39.1% | |
| Image Scan Hldgs ($IGE) | 30.7% | | 42.3% | 38.3% | |
| |
|---|
| Median (14 companies) | 29.2% | 24.1% | 30.5% | 29.1% | |
|---|
| Maruwa Co Ltd ($MAW) | 32.8% | 30.0% | 35.9% | 36.9% | 43.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Zytronic ($ZYT) | 22.9% | 27.8% | 25.6% | 28.8% | |
| Morgan Advanced Materials ($BA29) | 9.8% | 12.8% | 14.6% | 19.2% | |
| Gooch & Housego ($GHH) | 13.4% | 19.8% | 17.3% | 17.3% | |
| Dewhurst ($DWHA) | 13.7% | 14.7% | 13.4% | 13.6% | |
| Lpa Group ($LPA) | 5.7% | 4.4% | 9.3% | 11.6% | |
| |
|---|
| Median (15 companies) | 4.5% | 5.8% | 8.3% | 8.9% | |
|---|
| Maruwa Co Ltd ($MAW) | 17.8% | 14.7% | 19.6% | 21.4% | 28.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lpa Group ($LPA) | 14.8% | 1.8% | 6.0% | 7.3% | |
| Gooch & Housego ($GHH) | 2.7% | 3.9% | 11.3% | 5.2% | |
| Wintek Corp ($WTKA) | 2.4% | 0.6% | 1.6% | 4.2% | |
| Solid State ($SSP) | 1.3% | 1.4% | 2.0% | 3.7% | |
| Morgan Advanced Materials ($BA29) | 3.7% | 7.0% | 4.0% | 3.4% | |
| |
|---|
| Median (16 companies) | 1.3% | 1.4% | 1.7% | 1.6% | |
|---|
| Maruwa Co Ltd ($MAW) | 7.6% | 6.5% | 4.4% | 6.1% | 6.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Image Scan Hldgs ($IGE) | -45.6% | | 16.4% | 39.8% | |
| Morgan Advanced Materials ($BA29) | 10.9% | 18.4% | 21.9% | 31.6% | |
| Prophotonix Ltd ($PPIR) | | | | 25.8% | |
| Dewhurst ($DWHA) | 24.5% | 27.3% | 24.6% | 24.1% | |
| Zytronic ($ZYT) | 17.0% | 22.7% | 18.1% | 20.9% | |
| |
|---|
| Median (16 companies) | 4.7% | 9.9% | 10.3% | 15.3% | |
|---|
| Maruwa Co Ltd ($MAW) | 8.2% | 5.7% | 9.0% | 11.4% | 19.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Apc Technology Group ($APC) | 0.5x | | | 5.2x | |
| Walsin Lihwa Corp ($WALS) | 3.9x | 4.6x | 2.7x | 1.9x | |
| Stadium Group ($SDM) | 1.2x | 0.3x | 0.7x | 1.4x | |
| Lpa Group ($LPA) | 1.5x | 3.8x | 1.3x | 1.1x | |
| Morgan Advanced Materials ($BA29) | 2.3x | 1.8x | 1.7x | 0.9x | |
| |
|---|
| Median (13 companies) | 1.2x | 0.5x | 0.4x | -0.5x | |
|---|
| Maruwa Co Ltd ($MAW) | -2.0x | -2.7x | -2.5x | -2.6x | -2.0x |
